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The Mistake that 21% of Canadians are Making with their Credit Cards

One of the biggest mistakes you can make with your credit cards is to pay only the monthly minimum and a shocking 1 in 5 Canadians is doing just this. 

The minimum payment due on a credit card is the absolute lowest amount that your provider is willing to accept each month. 

Why is this bad? 

By paying only the minimum, you continue to carry a balance that triggers your card's APR and the longer you carry the balance, the more interest you'll be paying. 

Example: If you charge 6,000 to a credit card with a 20% APR and your credit card provider gives you a $120 minimum, by paying just the minimum it would take you 106 months to pay off the full $6,000.

The interest accrued in those 106 months would be $6,603 meaning you'd be paying $12,603 for a $6,000 charge. 

What to do if you can't afford more than the monthly minimum payment?

1. Cutting Costs

The first thing you should do is take an in-depth look at your financial situation and see where you can cut some costs to ensure that you're making more than the minimum monthly payment. 

Here are a few suggestions: 

- Cancel magazine or newspaper subscriptions

- Cut the cable and look into streaming services such as Netflix, Prime, Apple TV, etc. 

- Memberships you rarely use such as gym, Costco, etc. 

- Review your cell phone bill and look into more affordable providers

- Make your morning coffee at home rather than a daily trip to Tim's or Starbucks

- Take a lunch with you to work rather than eating out

While each of these ideas may only cut a few dollars each month, combined they will make for a substantially larger payment on your credit card debt. 

2. Balance Transfer Credit Cards

A balance-transfer credit card is a low-interest card designed to receive debt from a card with a high APR. The low interest is usually a promotion, which lasts anywhere from a few months to a year or longer.

The trick is to pay a majority of your credit card debt (or all of it) before the promotional APR period ends.

If you have multiple credit cards, you can try the debt roll-down method. With this strategy, you list your debts from highest to lowest interest rate, pay the minimum on all your debts, then make extra payments toward the debt with the highest rate. Once you pay off the debt with the highest rate, you “roll down” your extra payments to the debt with the second-highest rate. Continue with this method you'll save an exorbitant amount in interest.


3. Pay Cash When Possible 

Paying in cash will allow you to keep a tighter budget and you'll be much more aware of how much you're spending and on what. It's also a great way to avoid impulse purchases. 

If you have any questions about improving your credit score or how it can affect your ability to purchase a home, contact us at jprealestateservices.com. 


Affordable Home Upgrades with Big Impact

Updating your home doesn't have to come at a huge expense and it can pay off in a big way! 

Below are the top 15 affordable home upgrades that will make the largest impact on the look and value of your home: 

1. Removable wallpaper that makes a statement - think bold, bright, and even textured.      So long as it comes off easily, it can appeal to the right buyers and for those that dislike it, they know it's an easy fix! 

2. Rain Shower Head - You don't need to upgrade your whole bathroom to give it that spa feel. These showerheads can be found for under $50 and are very easy to install. 

3. Real and faux Succulents throughout your home in blank spaces will give it a comfortable and homey feeling that many are looking for. 

4. Mirrors! Mirrors make all spaces look larger. If you have a room that feels a little crowded, find a central focal point to hang a mirror and see how much larger the room feels. 

5. Eucalyptus Spa - Hang it from your shower head and soon you’ll experience aromatherapy. The steam from the shower will activate the plant’s oils, allowing you to breathe them in and feel refreshed. 

6. Artsy lampshades will spruce up any room, with or without the light on as they add an extra pop of colour or texture. 

7. LED lights strips will brighten up any space with a light glow that will add to the ambiance of the space. They are great for stairs, behind mirrors, kitchen cabinets, under shelves, or inside closets.


8. Peel and Stick Tiles to spruce up your kitchen are a great way to give an appearance of an updated backsplash, fireplace backing, accent wall or even accessories such as mirrors or frames. 

9. Door hardware, while this may not seem like the most luxurious item, it will make your home look updated and well cared for. 

10. Updated dishtowels, clothes, and hand towels. These don't come at a large expense but will clean up any room in which they are placed and give the room a bright and crisp look! 

11. Kitchen hardware - by replacing the hardware on your cupboards and drawers, you will give the space a sleek modern look. 

12. Warm LED Lightbulbs are great for bedrooms and living rooms where you want to enhance a cozier vibe than the bright lights needed in the kitchen or bathroom. 

13. New outlet covers - A fresh white new outlet cover will make any room pop! If you really want to make a statement, try the outlet covers with built-in, motion-activated lights which are great for dark rooms and hallways. 

14. Woven Baskets are a great place to store blankets and extra pillows. Not only do they look stylish but they are extremely practical too. 

15. Updated pillow covers can add visual interest to any room. This year's trend is bright and colourful with patterns or textures. 

If you're thinking of updating your home and don't have a large budget, these tips should give your home the lift you're hoping for and will also increase the value to potential buyers. 


Multi-Family Investments: The Pros and Cons

When considering purchasing an investment property the question between multi-family and single-family investments usually arises. 

The majority of new investors jump to the thought of a single-family investment that they will rent out as this is much more straightforward, and often familiar to them. 

Multifamily, however, is an entirely different story. Few people have experience buying an apartment building, let alone being in charge of one. Furthermore, multifamily properties are usually much more expensive and can be a complicated purchase.

Pro: Income Reliability

While it may be hard to achieve 0% vacancy at all times, you are very unlikely to have 100% in a multi-family home. So long as you have some renters in the property, you will have assistance covering your expenses, making them a more stable investment. 

Pro: Forced Appreciation

Typically, the value of a multi-family building is directly proportional to the income it generates.

An apartment building can provide $1 million income annually, while a single-family home may only bring in $20,000 - $30,000. 

As a multifamily investor, you have the opportunity to force appreciation of a property to increase the income of the asset through operational efficiencies, renovations and marketing strategies to increase the value of the property. 

Pro: Economies of Scale

Investors will benefit from cost savings per unit when it comes to multifamily investing.

For example, there's a cost-savings per unit due to a larger size or quantity produced. When considering acquiring apartments, contracting out rehab projects, maintenance and cleaning companies will be less expensive due to the more considerable amount of units.

Con: Initial Investment

The downpayment and mortgage on a single-family property are much more achievable for most investors. 

A multi-family investment can mean a multi-million dollar mortgage and a hefty downpayment. 

On the plus side, there are ways to keep your initial costs down such as investing with a group of people or when done so through a real estate syndication. 

While all investments carry the risk of loss, on average, a multi-family investment is safer than a single-family where all your eggs are in one basket. That said, both are excellent investments and real estate has historically been one of the best ways to build wealth for investors. 

If you have any questions or concerns about investment properties, please do not hesitate to reach out. We have decades of experience in this area and would be more than happy to share our knowledge and be of value to you. 

MLS® property information is provided under copyright© by the Vancouver Island Real Estate Board and Victoria Real Estate Board. The information is from sources deemed reliable, but should not be relied upon without independent verification.